Initial Coin Offerings: An Ally of Early Stage Ventures?

Frederik Hoffmeister Lose & Lars Shaho Skou Poshtara

Student thesis: Master thesis


Startups play a vital role in modern day economies through their creation of jobs, innovation and productivity growth. Still, they often suffer from financing constraints, and difficulties in raising external capital through the established channels due to their early stage of development and limited track records. However, a new opportunity to use blockchain and cryptocurrencies to raise funds and thereby finance early stage ventures have risen through the issuing of crypto-tokens, i.e. Initial Coin Offerings (ICOs).
Therefore, this study assess how early stage ventures can utilize ICOs to raise external capital. By extracting data from the reputable ICO listing site,, quality data on 715 completed ICOs conducted in the period between July 31st 2017 to March 8th 2020 has been obtained. The data is essentially utilized to investigate how potential ICO initiators can maximize their outcome through an ICO fundraiser, i.e. raise as much capital as possible. Therefore, a multiple regression model with total amount raised as the dependent variable is estimated using the method of OLS and by imposing heteroscedastic-robust standard errors.
The findings produced in this study suggest that early stage ventures that include more team members raise more capital through the ICO fundraiser. Furthermore, a negative link between ICOs offering a bonus through the fundraiser and total amount raised is found. The percentage number of tokens offered for sale to the public is further found to affect amount raised in an ICO negatively, while ICOs accepting any fiat currency are predicted to raise more capital. In addition, the findings indicate that if an ICO goes from not having a KYC to have one, the amount of capital it raises would increase. The study further finds several factors pertaining to the external environment, uncontrollable for the ICO initiators, to affect the total amount raised through an ICO fundraiser. Conclusively, it is recommended that early stage ventures adopt these findings and incorporate these in their ICO in order to maximize their fundraising outcome.

EducationsMSc in Business Administration and E-business, (Graduate Programme) Final ThesisMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
Publication date2020
Number of pages118
SupervisorsMichael Wessel